OVERLAND PARK, Kan.--(BUSINESS WIRE)--Jun 29, 2022--
Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, today announced the signing of a non-binding Memorandum of Understanding (MOU) to supply LG Energy Solution (LGES; 373220:KS), a leading global manufacturer of lithium-ion batteries for electric vehicles and energy storage systems, with a battery-grade lithium product from its lithium brine development project at its Ogden, Utah, solar evaporation facility.
Per the terms of the MOU, Compass Minerals would commit, for up to seven years initially, at least 40% of its planned, annual phase-one production to LGES starting in 2025. The MOU also includes an option for Compass Minerals to supply up to an additional 40% annually of the company’s phase-two production once the project is at full scale. The company has previously announced an expected annual commercial production capacity of 30 kMT to 40 kMT lithium carbonate equivalent (LCE) for the project, with an initial phase-one capacity of up to 10 kMT LCE coming online by 2025. As outlined in the MOU, purchase pricing would be based on market price and sales volume thresholds would be dependent upon product qualifications.
“Our lithium vision is to support the North American battery market by accelerating the development of a sustainable and secure domestic lithium supply chain,” said Chris Yandell, head of lithium for Compass Minerals. “Entering into this commercial relationship with a proven manufacturing leader like LGES will help enable that vision, as well as assist LGES in solidifying its U.S. supply chain.”
As previously announced, Compass Minerals is pursuing the sustainable development of an approximately 2.4 mMT LCE resource on the Great Salt Lake, readily available for extraction through existing permits, water rights and operational infrastructure at the company’s Ogden facility, the largest of its kind in the Western Hemisphere.
“Securing key raw materials has become critically important, in order to maintain our lead position in the global battery market,” said Dongsoo Kim, senior vice president of procurement center at LG Energy Solution. “We believe partnering up with Compass Minerals will aid in achieving that goal while solidifying supply chain in the U.S.”
Compass Minerals will continue good-faith negotiations with LGES toward a binding supply agreement as part of the company’s broader lithium project commercial offtake strategy.
About Compass Minerals
Compass Minerals (NYSE: CMP) is a leading global provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. The company’s salt products help keep roadways safe during winter weather and are used in numerous other consumer, industrial, chemical and agricultural applications. Its plant nutrition products help improve the quality and yield of crops, while supporting sustainable agriculture. Additionally, the company is pursuing development of a sustainable lithium brine resource to support the North American battery market and is a minority owner of Fortress North America, a next-generation fire retardant company. Compass Minerals operates 12 production and packaging facilities with nearly 2,000 employees throughout the U.S., Canada and the U.K. Visit compassminerals.com for more information about the company and its products.
Forward Looking Statements and Other Disclaimers
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the company's lithium development project, including its expected production capacity, vision, sustainability, and the potential execution and terms of any binding supply agreement. These statements are based on the company’s current expectations and involve risks and uncertainties that could cause the company’s actual results to differ materially. The differences could be caused by a number of factors including those factors identified in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s Transitional and Quarterly Reports on Forms 10-KT and 10-Q, as well as the company’s other SEC filings. The company undertakes no obligation to update any forward-looking statements made in this press release to reflect future events or developments, except as required by law.
The company has completed an initial assessment to define the lithium resource at Compass Minerals’ existing operations in accordance with applicable SEC regulations, including Subpart 1300. Pursuant to Subpart 1300, mineral resources are not mineral reserves and do not have demonstrated economic viability. The company’s mineral resource estimates, including estimates of the lithium resource, are based on many factors, including assumptions regarding extraction rates and duration of mining operations, and the quality of in-place resources. For example, the process technology for commercial extraction of lithium from brines with low lithium and high impurity (primarily magnesium) is still developing. Accordingly, there is no certainty that all or any part of the lithium mineral resource identified by the company’s initial assessment will be converted into an economically extractable mineral reserve.
View source version on businesswire.com:https://www.businesswire.com/news/home/20220628006192/en/
CONTACT: Media Contact
Rick Axthelm
Chief Public Affairs and Sustainability Officer
+1.913.344.9198
MediaRelations@compassminerals.comInvestor Contact
Douglas Kris
Senior Director of Investor Relations
+1.917.797.4967
krisd@compassminerals.com
KEYWORD: KANSAS UNITED STATES NORTH AMERICA CANADA
INDUSTRY KEYWORD: CHEMICALS/PLASTICS MINING/MINERALS TECHNOLOGY MANUFACTURING BATTERIES NATURAL RESOURCES
SOURCE: Compass Minerals
Copyright Business Wire 2022.
PUB: 06/29/2022 08:00 AM/DISC: 06/29/2022 08:02 AM
http://www.businesswire.com/news/home/20220628006192/en
